Mr. Vassilev, almost 2 years after the beginning of the pandemic, how is Bulgaria’s trade with Germany developing? Has it recovered to pre-pandemic?
Despite the challenges to international trade posed by the spread of COVID-19 worldwide, Germany retains its position as a leading trading partner for Bulgaria. In 2020, mutual trade reached 8.2 billion euros, which was a decrease of only 3.6% compared to the previous year (2019), ie. compared to the period before the pandemic, when we set another record of 8.5 billion euros. The data for 2021 provided by the German Federal Statistical Office, cover the period January-September. For this period, trade amounted to 7.33 billion euros.
Bulgaria’s exports to Germany (for the period) amounted to 4 billion euros. Imports from Germany amount to 3.32 billion euros. In other words, the positive trend for outpacing the development of Bulgarian exports compared to imports from Germany continues. If it is maintained for the whole year, then Bulgaria will again have a positive trade balance with Germany in 2021. In all probability for the fifth consecutive year and for the sixth time after the transition, Bulgarian exports will overtake imports from Germany.
Was there an increase in German investments?
According to preliminary data from BNB on the largest net positive flows of direct investment in the country for January-October 2021, Germany holds the second position with 290.4 million, while after Luxembourg is first (364.5 million euros). This establishes the place of Germany as a strategic investor for the country.
It is important to note that even in this difficult situation, there was still investor interest and some important investments were made (eg the investment of Ottobock in Blagoevgrad).
Are new investments expected and in which sectors?
The pandemic still creates uncertainty, which is reflected in companies’ investment attitudes and makes them more cautious. The sectors depend on the conditions offered in the country. In this regard, it is important to position our country as an attractive investment destination through targeted and active presentation of its benefits, as well as the continuous developments of the business climate in order to improve competitiveness.
Several German companies (5 in number, representatives of various industries) are in active negotiations for positioning, but due to their desire for confidentiality at the moment we could not go into details.
Will the change of power in Berlin affect Bulgarian-German economic relations?
Achieving a coalition agreement in a relatively short period of time was important to ensure political stability, which is a significant factor for both Germany and German business. As we have emphasized before, the Bulgarian and German economies work like docked vessels. Both positive and negative impacts are always reflected in bilateral economic relations. Let’s hope that political changes in both countries will not have a negative impact on the development of bilateral economic relations.
Will the German companies in our country benefit from the funds under the Recovery Plan?
The main objective of the Recovery and Sustainability Plan is to contribute to the economic and social recovery from the crisis caused by the COVID-19 pandemic. The Recovery Plan for Bulgaria is to be discussed again in the European Commission and after it is finally approved, it is possible that German companies doing business in Bulgaria will take advantage of it.
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